O'malley Warns Of Further Md. Cuts

Governor Tells Local Officials That Counties Must Share Pain

OCEAN CITY - -Gov. Martin O'Malley warned Saturday of reductions in state funding for police, health departments and community colleges as he spoke to local government officials who are expected to absorb $250 million in cuts.

The Democratic governor, delivering his annual address at the summer conference of the Maryland Association of Counties, tried to cast allegiance with localities in what he characterized as a joint effort to confront recession-wrought deficits. But he provided few details on how the cuts would be allocated by county and program.

"I know that none of you got into public service in order to dismantle your government," O'Malley said, after noting that he had trouble sleeping Friday night after a closed-door meeting with MACo board members who vented frustration about the budget situation.

"You go into public service, whether you're a Democrat or a Republican, because you want to build things up, you want to make things better," O'Malley said. "This is all very hard on all of us."

Depending on how they're structured, the reductions could mean library closings, fewer road improvement projects and other cutbacks in Baltimore and the 23 counties that benefit from state aid. The reductions also could force counties to lay off employees or raise taxes, though officials said next year's election would make tax increases politically difficult to enact.

O'Malley also mentioned possible reductions in so-called disparity grants that go to poorer areas of the state, including Prince George's County and Baltimore.

"Everybody's bracing for this," said Baltimore County Executive James T. Smith Jr., a Democrat.

Republicans objected to the lack of specificity from the governor. The state Senate GOP caucus posted an analysis on its Web site saying that local officials wanting "hard facts" were "sorely disappointed."

O'Malley plans to propose about $470 million in further cuts this month to the Board of Public Works, which can reduce the budget to make up for falling tax revenue when the General Assembly is not in session. Next year, O'Malley expects a budget gap of about $1.5 billion.

O'Malley, a former Baltimore mayor, has tried to shield local governments during previous rounds of cuts. That has prompted grumbling among Annapolis lawmakers who say that local governments must share the burden. Some counties have given employees raises or cut property tax rates while state workers have been furloughed.

When trying to balance the budget approved in April, lawmakers cut more than $160 million in road maintenance funding from local governments.

Harford County Executive David R. Craig said the legislature must stop passing unfunded mandates for education and other programs that cause the state budget to balloon. The county recently laid off about three-dozen employees and implemented furloughs while also enacting a slight property tax cut.

"We've shared in the pain already," said Craig, a Republican. "There's only so much we can do."

Local governments have been feeling the tax pinch as well. Local income tax collections have shrunk nearly 5 percent this year, and recordation taxes are down more than 8 percent. While property tax revenues rose by more than 6 percent, analysts say that won't continue as assessed values begin to reflect the declining home market.